This is a second resubmission of the proposal to extend our studies in unipolar depression and effects of antidepressants on corticolimbic connectivity and activity, to investigate the pathophysiology of Bipolar Disorder (BD) and effect of lithium treatment. This study will investigate, using functional magnetic resonance imaging (fMRI), corticolimbic activation and connectivity in 80 unmedicated BD patients - 40 in manic phase (BDM) and 40 in depressed phase (BDD), and 40 matched healthy subjects. The a priori defined regions of interest are: the cortical mood regulating region - ventral anterior cingulate cortex (vACC) and the limbic mood generating regions - particularly the amygdala (AMYG) and also ventral striatum (VST) and medial thalamus (MTHAL). The first aim is to measure corticolimbic connectivity in the resting steady- state using a connectivity specific measure - low frequency BOLD fluctuations (LFBF) correlations. The second aim is to measure corticolimbic activation using a passive picture viewing task as well as an active facial emotion recognition task. It is hypothesized that both BD groups will have decreased corticolimbic connectivity compared to healthy subjects. For activation tasks, the hypothesis is that in response to passive viewing of negative vs. neutral pictures BD patients will have decreased activation compared to healthy subjects but BDD patients will have a greater activation than BDM subjects. In the active facial emotion recognition task, BDM patients will have a greater amygdala activation than BDD and healthy subjects. A secondary aim is to investigate the effects of lithium treatment on corticolimbic activation and connectivity abnormalities in patients who agree to take part in the treatment phase arm of the study. It is hypothesized that lithium treatment will normalize corticolimbic activation and connectivity abnormalities seen at baseline. Another secondary aim is to investigate the effect of genetic factors such as the high expressing and low expressing genotypes of serotonin transporter (5-HTT) promoter linked region (5-HTTLPR) polymorphism on fMRI measures of activation and connectivity. Therefore, this study will, to the best of our knowledge, for the first time concurrently study brain activation and connectivity abnormalities in both phases of BD in unmedicated patients and also explore the effect of treatment and genotype. This study will also establish an experimental paradigm to study brain connectivity which could be used to investigate other disorders.